A day after the tax reform came into force with Official Gazette 355 of June 20, the export sector presented its observations not on the content of the reform itself, but on the supposed effect it would produce in other economic areas. such as the alleged intention of the Government to reduce or exclude various tariff sub-headings from the Foreign Exchange Outflow Tax (ISD) relief.
The tax reform has already been published in the Official Gazette
For this reason, the Corporation of Export Guilds (Cordex) issued a statement asking the Minister of Economy and Finance, Pablo Arosemen; and the Minister of Production, Foreign Trade, Investments and Fisheries, Julio José Prado, that tariff subheadings related to raw materials, inputs and capital goods used by their production chains are not excluded from the list.
The union confirmed that this exclusion would be disadvantageous, since any reduction will lead to an increase in production costs, further affecting the situation in the export sector, which cannot pass these costs on to its selling price.
“Fulfilling our responsibility, we warned the competent authorities for production and public finance that the new tax reform cannot be financed by increasing costs in the production sector. We asked the other sectors, grouped in Cordex, to do the same,” José Antonio Camposano, president of the Board of Directors of Cordex, which gathers 75 percent of Ecuador’s non-oil export supply, said on social media.
Who will no longer pay income tax from July, when the 2023 tax reform is implemented
This intention to reduce or exclude subtitles from this benefit would occur in a context where, unlike previous years, exports have grown by barely single digits, according to data from the Central Bank of Ecuador, Cordex reports.
The union explained that the reduction in demand in many countries has adversely affected the ability of exporters to find receptive markets. Likewise, the sector faces an increase in production costs such as raw materials, inputs, labor and security due to high crime rates in the region.
Source: Eluniverso
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